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Why You're More Likely to Die After Getting Paid

Last year, Notre Dame economist William Evans, along with Timothy Moore from the University of Maryland, documented that mortality rates spike by almost one percent on the first day of every month, remain high for the next few days, and then steadily decline over the course of the month. Now they think they’ve figured out one reason why: our paychecks are killing us.

In a study to be published in an upcoming issue of the Journal of Public Economics, Evans and Moore examined the death records of four demographic groups in the U.S.: seniors on Social Security; military personnel; families receiving tax rebate checks in 2001; and recipients of Alaska’s Permanent Fund dividends. Their results show that mortality increased the week after checks arrived for each of these groups.

Though the effects are strikingly consistent across populations, there are some interesting variations:

In counties with a large military presence, daily mortality among 17-29 year olds increases by around 10 percent the week after mid-month paychecks arrive.

During the week that direct deposits of Permanent Fund dividends are made, mortality among urban Alaskans increases by 13 percent.

Evans was good enough to answer some questions about his research:

Q: How did you build your database?

A: We looked at all the death records from 1973 to 2006, some 75 million deaths in the U.S. The hardest part was finding data on when people get paid, and the real genesis of the test was our focus on military pay. We looked at 23 counties with large military bases, and examined from 1973 to 1988, before the large round of base closings began in the early 1990s. The effects among military personnel were striking.

Q: Was there a stronger correlation between getting paid and dying among military personnel?

A: There was, significantly so. We find much larger responses within younger people, people with low education, and people with liquidity issues. And the military hits on all three of those factors; plus you have some partying issues there. In counties with a large military presence, daily mortality among 17-to-29-year-olds increases by around 10 percent the week after mid-month paychecks arrive, whereas over the same period there is little change in areas with a small military presence.

Q: So there was a bigger effect after the second paycheck than after the first?

A: Right, it’s that second paycheck that’s the real killer, demonstrably more deadly than the first. We figure that when the first check comes, you have all your bills to pay, so that check is earmarked for those activities. You have a much freer disposal of the income from your second check.

Q: What other granular data stuck out to you?

A: The differences in time-frame were interesting. For most of the population, the effect of the paycheck on increased mortality was about a week. But for the military personnel it was much shorter, only 3 or 4 days.

Q: What about cause of death?

A: For the 17 to 29 population, you see lots of substance abuse and blunt force trauma from auto accidents.

Q: So is it fair to say that when people get paid, they go out and engage in risky behavior? They go party and buy drugs and drive drunk? Is that what’s happening here?

A: There is some of that, but it’s not that extreme for the most part. For a lot of people, you’re just going to the mall to buy something, which increases the risk of all kinds of things: car accidents, heart attacks. It’s not that you’re doing crazy, irresponsible things. It’s not the receipt of income that’s necessarily driving this, it’s the activity generated by the receipt, that’s the killer activity. And that cuts across the entire population.

Q: Did that surprise you, that it was consistent across different types of people?

A: Very much, I think that’s the most important phenomenon with this study, just how broad-based the effect is. The within-month mortality cycle holds for everyone, young and old, rich and poor. It is enhanced for certain demographics. But it’s also very persistent across populations. So, it’s not just poor people or young people, it’s everyone.

Q: What about issues with anxiety that getting paid can cause? Was it merely the physical activity associated with increased consumption that caused deaths, or is there also a psychological element here where people get more stressed and feel more anxious around the time they get paid?

A: That’s something we’re going to look into next. There are these high-frequency surveys that ask how happy people are. We’re interested in whether people are happier on the first of the month, and whether that matches our data on paychecks. Understanding the self-reported health status of people should help get at what some perceive to be these psychological or mental risks associated with getting paid.

Q: You looked at data going back more than 30 years. What changes did you notice?

A: I think we were struck with how consistent it was. We really thought this cycle would have gone down over time, since people have so much more access to consumer credit now than they did 30 years ago. We thought credit cards would’ve had a dampening effect. But we found no difference over time within this. The peak to trough is just as big in the mid to late 2000s as it was in the mid-70s.

Q: So What’s the lesson here? That we need to smooth consumption even more?

A: Well right, but how do you do that? Do you pay people more frequently? Remember, in the military, it’s that second paycheck that’s the real killer, so it’s not as simple as splitting one payment into two. There are a handful of states that have moved to a twice monthly system of welfare payments. We’re interested to see whether the distribution of deaths have changed with that. And of course, the other thing to look at is whether mortality response is correlated with how big the paycheck is.

Bill

July 1, 2011 @ 3:21pm

During the time of the study, a portion of the military got paid once a month. The 10% may be more significant than suggested.

emily

July 1, 2011 @ 3:30pm

Did you consider possible fraud as an issue? If grandma dies on Tuesday and her check comes on Wednesday, is it possible her family may report her as dying on Wednesday instead? This probably isn't widespread but a small reporting bias may affect the overall pattern.

Alana

July 4, 2011 @ 5:56am

This is a HUGE problem in Japan. The missing centenarians. Cities look for the 100 year olds to congratulate them only to find they've been dead for years while family members raid their social insurance.

DaveyNC

July 1, 2011 @ 3:42pm

I live near Ft. Bragg, in North Carolina. It is common knowledge to avoid Fayetteville on military paydays.

Other dangerous times are when the troops get home. A friend of mine in the Army told me that they lose more soldiers in the month after they get home to motorcycle wrecks than they lose in the month prior to their return. Those guys get home, they have a lot of money in their pockets and they head straight to the motorcycle dealers. And the bars. Not a good mix.

Patrick

July 1, 2011 @ 4:58pm

Funnily enough, there was a related term for this in the early days of the industrial revolution: "Blue Monday" was when workers, being paid at the end of each week, partied so hard with their paychecks that they were often either too hungover or still drunk to show up for work on Monday -- or simply didn't feel like it.

And of course then you see in the literature calls from industrialists for a more "disciplined workforce," along with support for the temperance movement (which the wealthy properly understood as simply a prohibition for the workers, not the owners).

Jen

July 5, 2011 @ 1:50pm

What if the patients are in coma? They probably don't know that they get paid or not.
Anyway, when a guy is about to die of an illness, will their family tell them "Hey! You just got paid today."
In that situation, these things seem not that important

peter jones

July 5, 2011 @ 4:49pm

Might be worth checking when the medical staff get paid, most nurses i nkow are right piss heads.

Rodolfo Araújo

July 7, 2011 @ 9:43pm

Many other things happen on the first day of the month - so there could be a myriad of causes. Many correlations, but perhaps no single cause.

And having money means a lot of things to be considered, for instance:
- People buy their medications and die for the side effects;
- People overeat, and die of indigestion;
- People party too much, and die because of the excesses;
- People pay their bills, see they have no money left, and die of despair;
- People die.

Pdawg20

July 7, 2011 @ 10:05pm

Did deaths drop before paychecks? Maybe prior to pay, with less disposable cash, people were less likely to engage in things they normally might do.
And I suspect that after being paid you feel a little more invincible.

J S

July 27, 2011 @ 1:31pm

This is nothing new. My grandparents saw this running a medium-sized farm in the 1920's. Milk-check came once a month so they could pay the 'hired men'. Then the workers would go off on binge-drinking and whatnot for a few days or a week until they spent it all and were back to the farm to work again. Hard workers and honest people, just rough choices.

mike o'donnell

October 5, 2011 @ 11:17am

My friend, who owns a building company and pays cash, got fed up of high absenteeism on Mondays. So he changed pay day to Mondays from Fridays. His Monday absence levels mysteriously disappeared, and the attendance levels for the rest of the week remained static. It seems that drinking with a full wallet on a week day is not as appealing as a weekend!